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Fiscal Planning and Local Government Administration in Nigeria: the Quest for Sustainable Rural Development

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Fiscal Planning and Local Government Administration in Nigeria: the Quest for Sustainable Rural Development African Journal of Business Management Vol. 6(9), pp. 3482-3489, 7 March, 2012 Available online at http://www.academicjournals.org/AJBM DOI: 10.5897/AJBM11.2154 ISSN 1993-8233 ©2012 Academic Journals Full Length Research Paper Fiscal planning and local government administration in Nigeria: The quest for sustainable rural development Samihah Khalil and Salihu Abdulwaheed Adelabu* Ghazali Shafie Graduate School of Government, College of Law, Government and International Studies, Northern University of Malaysia, 06010, UUM Sintok, Kedah, Malaysia. Accepted 7 October, 2011 The raison d’etre of a local government is to collect its revenue efficiently and to use that revenue to provide infrastructural development for its tax payers. Local government as the third tier of government cannot, therefore be ideal from the financial view lens if it collects its revenue in a slip-shod manner and devotes a large percentage of it to the maintenance of a top- heavy administrative set-up, with a relatively small proportion of the revenue left for the provision of infrastructural development which are of direct benefits to the local inhabitants. The purpose of this paper is to critically examine local government accountability in respect of budget and budgeting system in order to improve sustainable development at the local level. The paper tries to study the main source of revenue of local governments in Nigeria, and determine how the resources are utilized to deliver infrastructural development to the people. Also, information on budget and budgeting of Irepo local government is analyzed in the study. There are 774 local governments in Nigeria. This research study covers 33 local governments in terms of disbursement of statutory allocation, and Irepo local government in terms of budget and budgeting analysis. As far back as 1999, the Nigerian local governments are being given enough by the Federal Government in order to provide infrastructural development to the citizens in the local area, but it seems the said public revenue are being mismanaged by political leaders and local governments’ officials in Nigeria. The findings of this paper revealed that < 5% of the statutory allocation accrued to the local governments under consideration is being expended on infrastructural development, while > 10% is used for personnel expenditure as the cost of delivering infrastructural development by local governments in Nigeria. So, further researches can still be carried out on fiscal planning by local governments for sustainable development in the remaining local governments in Nigeria. This paper therefore recommended that the policy/decision-makers should make use of the findings of this study to help inform future decisions on fiscal planning in the local government administration in order to bring about sustainable development to the rural dwellers in the local governments. It is found that there is need for proactive measure for fiscal planning in order to sustain infrastructural development in the local government administration. Also found, is that local governments need to put in place a good fiscal planning that will sustain development at the local level. Key words: Fiscal planning, sustainable development, local government. INTRODUCTION Local government as an institution of governance is crea- citizenry and also extends the administrative and political ted to provide and sustain infrastructural development control to the community (Wanjohi, 2003). Ola (1984) in rural area. A local government is an institution whose posited that local governments exist to provide essential operations address the needs and aspiration of the services, and serve as a vehicle for rural development. Adamolekun (1983) posited that the goal of local government is to provide efficient service delivery vis-à- vis rural development. Researchers (such as Mass, 1959, *Corresponding author. E-mail: [email protected]. Oladosun, 1981, Adamolekun, 1983, Ola, 1984; Aghayere, Khalil and Adelabu 3483 1987; Okeem, 1989; Lawal, 2000) in the recent past have different reforms in the public service, local government discussed extensively about sustainable development in administration in Nigeria experienced fundamental the rural areas. There exists a series of strategic planning changes in 1976 through a comprehensive local for bringing sustainable development to the society. Few government reform during the reign of General Olusegun amongst these strategic planning are fiscal planning by Obasanjo (Gboyega, 1983; NCEMA, 1990). institutions, participatory governance, policy and scenario According to Awotokun (2005), the term local analysis, monitoring and evaluation process in the government administration in Nigeria attracted serious organization. All these unprecedented strategies will lead attention both nationally and internationally since 1976 to sustainable development. reform. It is the reform that opened the rural area to According to OECD (2001), there is an unprecedented meaningful development in terms of input that could be development in the past few years in developing garnered from the federation account. The 1976 local countries. Life expectancy ratio has risen, infant mortality government reform created for the first time, a single tier rate is increased, and primary school enrolment rate is structure of local government administration in Nigeria. doubled. Food production and consumption is said to be This single tier structure can be seen in form of the func- increased by 20% faster than population growth. tions, the structure, the financial resources, the place of Improvement in income levels, health and educational traditional institutions, relationships with state govern- attainment are on the increase. There is equally an ment; and law enforcement in the local governments. increase in the spread of democratic, participatory gover- Following the 1976 reform, a fixed proportion of sta- nance, and there have been forward leaps in technology tutory allocation of revenue from the central government and communications. Development is synonymous to to local governments is entrenched in the recommen- freedom in any community. If a society is developed, the dations of the Aboyade Revenue Commission of 1977 people in that particular society is always said to be free (Awotokun, 2005). This leads to the establishment of the from diseases, hunger, poverty, illness, illiteracy, igno- Revenue Mobilization Allocation and Fiscal Commission rance, joblessness, and insecurity. Sustainability could be (RMAFC), and the commission is charged with the the right word to describe development. In pursuit of responsibility of allocating revenue to the three tiers of development, access to resources ought to be made free government - federal, state and local. Other commissions for any community. According to Lawal (2000), the that have worked on the disbursement of federal statutory development of the rural dwellers has been the concern allocation before the Aboyade com-mission are Phillipson of every responsible and responsive government. He (1946), Hicks-Phillipson (1951), Chick (1953), Raisman argued further that development remains insignificant, if (1958), Binns (1964), Dina (1968), and Okigbo (1980) development does not positively affect the lives of the worked on statutory allocation disbursement after the people in any society in question. Aboyade commission. King and Murray (2002), opined that development is As agent of rural development, local governments are emphasized to be freedom from fear, which include to use the funds made available to the local governments freedom from human want (human development), and by both central and state governments and their internally may comprehensively cover all the menaces that generated revenue to improve on the lives of the people threaten human survival, daily life and dignity. In order to within local government’s area of operation through the deliver the required social services to the rural dwellers in following: Initiating and attracting developmental projects Northern Ireland, Greer’s (2001, 2002) work on to the local governments such as provision of access partnership governance. Greer et al. documented the roads, water, and rural electricity; communal services pervasiveness of partnerships among local authorities, such as the construction of roads, bridges, water ways; and comprehensively explore range of case studies in and personal welfare in such areas as education, relation to sectoral and spatial relationships. Each of the housing, and healthcare service delivery system. Local Greer’s study established potential linkages and formu- governments can equally generate revenue to improve lates a strategic framework for development among on the lives of the people within their areas of operation private sectors, and public, which is what is known as pri- through initiating and attracting developmental projects to vate public partnership (PPP). Improving service delivery the local governments such as provision of access roads, is an important way of improving the economic and social water and rural electricity; sustaining livelihood through values of humanity. the provision of credit facilities for agriculture, arts, crafts and small scale business; and encouraging the formations of cooperative societies and other economic LOCAL GOVERNMENTS: A PANACEA FOR RURAL groupings (Ajayi, 2002). Local government as a public DEVELOPMENT business consumes huge resources in providing vital services which are managed by elected and appointed
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